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Helium Demand Ballooning

Photonics.comOct 2007
AMARILLO, Texas, Oct. 19, 2007 -- The worldwide shortage of helium is resulting in rising prices and tight supplies for party supply stores, but it won't deflate Macy's annual tradition of floating gigantic characters down Broadway in New York City this Thanksgiving.

An international helium shortage, warned about for years, has become more evident recently, industry experts said, as rising global demands for the lighter-than-air, nonflammable gas mean short supplies for low-priority, consumer-level uses.

While helium is the second most abundant element in the universe, it is hard to find on Earth, where it is a byproduct of radioactive decay underground. Here, helium is extracted from natural gas. While all natural gas contains at least trace quantities of helium, the gas is distilled from only about seven percent of the natural gas extracted from the ground, and only a few plants worldwide have the capability of separating helium from other gases and purifying it.

In the US, purified helium is commercially recovered from natural gas deposits mostly in Texas, Oklahoma and Kansas. It was first discovered in 1903 when an exploratory well in Kansas produced a gas that "refused" to burn. Some of the richest sources are under the Texas Panhandle.

Most people's familiarity with helium may be through its use in festive balloons, which accounts for about seven percent of the helium market worldwide, but the vast majority of supplies of the gas are for more high-tech applications.

Helium is essential for things that require its unique properties -- its inertness, its incredibly low "boiling point" (-451.48 °F) and its high thermal conductivity. It exists as a gas except under extreme conditions. At temperatures close to absolute zero (-459.7 °F), helium is a fluid; most materials are solid when cooled to such low temperatures.

Liquid helium is used to supercool magnets in MRI (magnetic resonance imaging) machines, representing 20 percent of all helium use globally. Liquid helium is also used to cool some thermographic cameras, which detect heat instead of visible light and are used by search-and-rescue teams can locate people among rubble or through smoke. Another 17 percent of the helium produced globally is used to provide an inert gas shield for laser welding.

Other applications of helium include: in supersonic wind tunnels; to provide lift for high-altitude scientific research balloons; to pressurize space-shuttle fuel tanks; in fiber optics, semiconductor, computer chip and flat-panel display manufacturing; as a protective gas in growing silicon and germanium crystals and in titanium and zirconium production; to create a nitrogen-free atmosphere, when mixed with oxygen, for deep-sea divers so they won't suffer from "the bends;" in the study of superconductivity and to create superconductive magnets for particle physics research; and in metallurgy and analytical chemistry and in leak detection. Because helium won't become radioactive, it is also used as a cooling medium for nuclear reactors.

The first laser invented, a helium-neon laser, is used today in laser eye surgery and laser pointers.

The shortage is a result of a "perfect storm" of problems, with a new plant in Algeria ramping up production later than anticipated and with half the expected capacity, a plant in Qatar coming online slower than expected, and the world's largest source of commercial helium, the Exxon Mobil plant in Wyoming, operating at only 80 to 85 percent of capacity because of plant problems. Also, the Bureau of Land Manaqement (BLM), which provides crude helium to the refiners that supply about 40 percent of US helium production, has put restrictions on how much crude helium refiners can take out of the BLM pipeline to process, Phil Kornbluth, executive vice president of Matheson Tri-Gas Global Helium in Basking Ridge, N.J., said on National Public Radio's "Talk of the Nation" program last week.

The US government became interested in helium during World War I as a safe, noncombustible alternative to hydrogen for use in buoyant aircraft. In 1925 Congress created a Federal Helium Program to ensure that the gas would be available to the government for defense needs. The Bureau of Mines constructed and operated a large helium extraction and purification plant just north of Amarillo beginning in 1929. From 1929-1960, the federal government was the only domestic producer of helium.

Because demand for helium increased during and after World War II, the government began offering incentives to private natural gas producers to strip helium from the gas and sell it to the government. Some of this helium was used for research, the NASA space program and other applications, but most was injected into a storage facility known as the Federal Helium Reserve.

By 1990 private demand for helium far exceeded federal demand, and the 1996 Helium Privatization Act redefined the government's role in helium production. The BLM was given the responsibility of operating the Federal Helium Reserve and providing enriched crude helium to private refiners.

The BLM's facility near Amarillo provides crude helium to refiners that supply about 40 percent of helium supplies in the US, and almost 35 percent of the world’s helium production. The government's strategic stockpile of helium in Amarillo, which held a three-year worldwide supply, is currently being sold off and will be mostly gone by 2015, Kornbluth said.

Under the 1996 Helium Privatization Act, by 2015 the secretary of the interior is to sell 850 million standard cubic meters (scm) from the Federal Helium Reserve, leaving 17 million scm, which represents a less than two-year supply.

The Federal Helium Program's original purpose, in 1925, was to ensure supplies of helium to the federal government for defense, research, and medical purposes. Over time, the program evolved into a conservation program with a primary goal of supplying the government with high-grade helium for high-tech research and aerospace purposes.

Party supply stores and florists around the country are complaining about increased helium prices and short supplies and its affect on their bottom lines.

"It's been affecting us since September 2006, and lately it's been getting worse," Lisa Dyer-Love, manager of Cook's Balloonery in Westerville, Ohio, told the Columbus Dispatch.

"The price of helium has gone up several times in the past year," Matt Johnson, manager of Gases Plus, which supplies helium to party stores, car dealers and other consumers in Montana, told the Billings Gazette. "On average, when there's been a price increase, it's been 15 to 20 percent."

In September, industrial gas companies in Japan announced they planned to cut helium gas supplies by as much as 30 percent following significant shortages from US suppliers, a move that could have a detrimental impact on semiconductor manufacturing and electronics production in that country.

Earlier this month, Worthington Cylinders, a Columbus, Ohio-based supplier of pressure cylinders worldwide, announced a 6 percent price increase on all of its portable party kits, called Balloon Time Helium Balloon Kits, effective Nov. 1.

"The current short supply and increased demand for helium has resulted in significantly higher helium prices. As a result, the company is forced to pass on its first price increase to the market in several years," said Dusty McClintock, Worthington Cylinders vice president of sales.

"The bottom line in terms of helium supply is that there is very little excess helium refining capacity, and domestic supplies of crude helium are growing ever tighter. Until overseas plants are fully online and/or additional plants are built, we're potentially facing additional supply disruptions, if not shortages," stated Leslie Theiss, manager of the BLM Amarillo field office in a January 2007 article on the BLM Web site. "For 350 days last year, the BLM’s crude helium enrichment facility was operating at full capacity, supplying more than 6 million cubic feet a day or 2.1 billion cubic feet per year. We can't increase production because this would result in adverse impacts to the gas field, wells, compressors and other equipment."

The Macy's Thanksgiving Day parade already has enough helium stockpiled to keep its balloons flying this November, Director of Media Relations Elina Kazan told the media recently. Macy's has faced a helium shortage before -- in 2006, parade organizers reportedly decided to use fewer balloons as a result. Also, when the gas was unexpectedly unavailable in 1958, parade organizers filled the balloons with air and suspended them from cranes, according to the Macy's Thanksgiving Day Parade Web site.

There may be relief coming, however. Gas companies Air Products and Matheson Tri-Gas announced this week they will build a liquid helium production plant near Big Piney, Wyoming, with an initial capacity of 200 million standard cubic feet per year. Production at the plant is expected to begin in 2009. The plant will be the 10th liquid helium plant operating in the US, and the first new US facility since 2000, the companies said.

The facility would process natural gas from the Riley Ridge Field in Wyoming, the second largest helium-rich natural gas field in the US. Riley Ridge is believed to contain sufficient helium reserves to support production for decades.

"We are enthusiastic about developing the helium reserves at Riley Ridge. Bringing on this new source, with very long-lived helium reserves, will enable us to further diversify our helium supply and enhance our ability to reliably serve our worldwide customers," said John Van Sloun, general manager, Helium and Rare Gases, for Air Products. "We continue to see tightness in the supply of helium in the global market. The initial helium volumes expected from Riley Ridge in 2009 are relatively small, but this important new facility can produce additional product to help meet growing global demand."

Also, it was announced last month that Australia’s first-ever helium production plant will be built in the country’s Northern Territory at Darwin after a deal was reached between gas companies there. It is believed that the project will have the capacity to meet the entire country’s helium needs and also supply export markets.

That branch of science involved in the study and utilization of the motion, emissions and behaviors of currents of electrical energy flowing through gases, vacuums, semiconductors and conductors, not to be confused with electrics, which deals primarily with the conduction of large currents of electricity through metals.

The technology of generating and harnessing light and other forms of radiant energy whose quantum unit is the photon. The science includes light emission, transmission, deflection, amplification and detection by optical components and instruments, lasers and other light sources, fiber optics, electro-optical instrumentation, related hardware and electronics, and sophisticated systems. The range of applications of photonics extends from energy generation to detection to communications and...

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